Label Complains That Amazon Devalues Artists By Making Music Cheap

from the you-got-it-backwards dept

This is unfortunate. Nearly two years ago, we wrote about the indie music label Asthmatic Kitty, which seemed to take a really forward looking attitude towards the new music market. In that interview, the label noted the reality of the new world, and why it was important to focus on reasons to buy, rather than assuming that people would just pay to hear music. This is what was said at the time:

I operate under the conviction that people buy records because they want to own them, not because they want to hear them. It is too easy these days to hear a record without having to buy it. I don't resent that fact, rather I feel we at Asthmatic Kitty embrace it through streaming albums and offering several free mp3s (even whole free albums). And why do they want to own it? They want it to illustrate to others their taste and identify who they are as a person. I also believe they want to be part of something bigger than themselves, they want to belong.

Our job is no longer to sell folks things they want to hear. They want an experience and to identify themselves as part of a community. Ownership then becomes a way of them supporting your community through investing in that community. Fostering that in an honest, transparent and "non-gross" way takes a combination of gracefulness, creativity and not taking oneself too seriously, while still taking art and music seriously.

Apparently, however, they do resent Amazon for making music available cheaply. Reader Colin points us to a recent article about how Asthmatic Kitty has sent out a letter to fans of artist Sufjan Stevens, complaining that Amazon's pricing is too low and asking people to go to Bandcamp and pay more instead. They do admit to being somewhat conflicted about this, at least:

"We have mixed feelings about discounted pricing," the label explained.

"Like we said, we love getting good music into the hands of good people, and when a price is low, more people buy. A low price will introduce a lot of people to Sufjan's music and to this wonderful album. For that, we're grateful.

But we also feel like the work that our artists produce is worth more than a cost of a latte. We value the skill, love, and time they've put into making their records. And we feel that our work too, in promotion and distribution, is also valuable and worthwhile."

While they're certainly not attacking Amazon or fans, the whole email does feel a little off. The simple fact is, if people want the music (as the label seemed to recognize last year), they can find it somewhere for free. Amazon's prices are meaningless when it comes to the "value" of the music. Price and value are not the same thing. Rather than complaining about the price that Amazon sets on the album, why not give people additional reasons to pay directly at Bandcamp -- such as providing valuable extras if they do. Or discounts on other merchandise. There are all sorts of positive ways to get people to find it worthwhile to spend money without making them feel guilty and bad for paying a price that is legitimately offered by a retailer.

Not about the artists.

I have a hard time believing that they care about how much people are paying for music because they're worried about how people "value" their artists. It has been said several times by people in the music industry that album sales aren't the end-all be-all measure of an artist's success. The problem seems to be related more to the wallet thickness of the label's head honchos. Those "devalued" artists are still touring and still drawing crowds, and I think that taking the time to go to a concert shows a greater appreciation for the "value" of an artist than spending an extra 3 dollars on an album.

On the other hand: labels devalue music by not allowing Amazon to sell it to me because I'm in the wrong country.

Which of these do you suppose is closer to reality?

It's a shame that Surfjan Steven's label is doing this as well. Back in the day, I was a happy eMusic user and bought a *lot* of albums (at least 8 a month) when music was cheap. Indie isn't really my genre, but the cheap prices and high volume of purchases made it easy to experiment and Stevens was an artist often recommended. When labels forced the prices up, I quit and I maybe buy one album every couple of months at the moment (thanks partly to the lack of legal stores I can use), and those are usually genres and/or artists I'm already very familiar with.

So, when the prices went up, I went from being a potential customer for Stevens' work to somebody who's unlikely to even dabble in the relevant genre. Yeah, nice move.

Re: Re: But we also feel like the work that our artists produce is worth more than a cost of a latte.

I would agree, but the only way to have your music on Pandora is to sell a physical CD through Amazon. It's a stupid and frustrating rule for Pandora to have, and it doesn't even do Amazon any favors, really. I simply gave them ONE CD to sell, and I don't promote Amazon as a way to find my music. Works OK, though I still think it's dumb that I essentially had to give a CD away to Amazon. I'd rather have just given it to a fan.

Re: Re: Re: But we also feel like the work that our artists produce is worth more than a cost of a latte.

Hmmm... I'm not sure if I follow you here. You're using a promotional tool which is (I think, correct me if I'm wrong) provided to you for free. Then you complain that the providers of said tool are allowed to make some money if their service leads *directly* to somebody buying your music?

You can always choose not to use Pandora as well if you don't like that. Maybe you could start by finding a promotional avenue that doesn't restrict itself to a single country?

Re: Re: Re: Re: But we also feel like the work that our artists produce is worth more than a cost of a latte.

Oh, I've no problem with Amazon or what they offer, giving people a chance to make money is good in my book. And I like Pandora, too. I just think it's silly that Pandora requires a physical release to exist at some other site. They're a digital streaming service, it's odd that physical product plays into it at all. I suppose it does cut down on the amount of submissions they get, though.

And several years ago, I know that Pandora didn't require physical releases. I'm sure there was some sort of licensing issue behind it. Still, I'd rather not have to continue making physical CDs in order to seem "legit" in a digital industry. It just doesn't make a lot of sense. You'd be surprised (maybe not, maybe you're a musician, too) how many sites, magazines, and people don't take you seriously (as in answer the phone or open the mail) if you don't have physical CDs to submit. Not that *they're* going to buy them...

But you're correct, I *believe* Amazon is still free to sell through on some level. My experience is limited, I only dealt with them to get listed on Pandora. I have no idea if the CDs are still listed at the site or not. I really don't care. I hate selling CD.

It's just not so simple to disregard Amazon as people suggest. Pandora is a powerful marketing tool for a musician. You really need to play ball with them. Now if only they'd set up something with bandcamp.

Re: Re: Re: Re: Re: But we also feel like the work that our artists produce is worth more than a cost of a latte.

I should mention that while Amazon is free, making CDs obviously isn't. Plus you have to obtain a barcode, which also isn't free, though not too expensive. And you need an ISRC number (free), you need to list with Soundscan (I'd rather not support them and their shady sales calculations), etc... It's a pain. Most musicians are wary of this kind of work. I've gone through the process, I figure it gave me enough experience to start my own label... one day, maybe.

Re: Re: Re: Re: Re: Re: But we also feel like the work that our artists produce is worth more than a cost of a latte.

Nothing to stop you from hiring a manager to take care of that for you, of course, but he'll want his cut as well...

Anyway, that links back down to the post of mine below (I didn't click reply for some reason) - the effort involved in making the CD is non-trivial, so Pandora won't get spammed by every amateur who can upload a digital file.

Re: Re: Re: Re: Re: Re: Re: But we also feel like the work that our artists produce is worth more than a cost of a latte.

I replied to the other post, too. I kind of agree that physical copies cut down on some spam, but I doubt it's a cure all. I've worked in a record store and we were constantly "spammed" with real CDs every day. It's not a marker of seriousness anymore, it's more like an entry fee. And in a twisted roundabout way, I think it leads to a lot of musicians resenting the download culture. We don't want to spend money making CDs, and people don't want to buy them. But to appear serious, we kind of have to make them, and it's expensive.

Pandora could effectively accomplish the same thing by only requiring barcodes and ISRCs which don't require physical product. Hell, they could throw in a 'music store" requirement, just not Amazon only.

I wasn't aware that Pandora was limited to the US. That's good to know. Thanks.

Re: Re: Re: Re: Re: Re: Re: Re: But we also feel like the work that our artists produce is worth more than a cost of a latte.

"I wasn't aware that Pandora was limited to the US. That's good to know. Thanks."

Ah, please go and educate yourself - there's probably a market you haven't tapped somewhere. Check every site's FAQs and you might be surprised. Music distribution sucks for anyone outside of North America and core European countries, quite frankly.

Here's a few pointers off the top of my head:

Rhapsody: US only

Spotify: several countries, US currently excluded but they're working on it.

Amazon: Currently only in countries they have a specific named store, although they can ship physical CDs anywhere (e.g. A German can buy physical from any store or digital albums from amazon.de, but someone in Spain is only allowed to buy physical releases).

eMusic: North America and Europe only, I believe. They used to offer music anywhere, but label deals eventually restricted them to these places, which have very different selections based on licensing.

7digital: North America and Europe only

"Now find me a vinyl distribution deal and we'll be friends forever."

I'm a forum poster, not a miracle worker! Wish I could help, but not my specialist subject I'm afraid.

Re: Re: Re: Re: Re: But we also feel like the work that our artists produce is worth more than a cost of a latte.

My main beef with Soundscan is that they STILL don't have a "hip hop" genre in their submissions. You have to list as "Rap Music" which is incredibly ignorant of the musical form, and slightly dismissive. Rapping is something a person does IN hip hop. We don't call other genres "Singing Music". And I make "instrumental" turntablism, there's no rap at all in it, though it IS hip hop.

Groan. There's no end to the amount of stupid things about the industry.

worthless pussy

"But we also feel like the work that our artists produce is worth more than a cost of a latte."

Why is this?

When you think of it, the amount of work that goes into a latte is staggering. Consider:

The work involved in growing the coffee, which has high nutrient requirements and very specific environmental needs, not to mention the amount of time the plant has to be alive before it bears beans worth picking

The amount of work that goes into harvesting and shipping the beans.

The amount of work that goes into sorting and roasting the beans.

The amount of work that goes into creating, processing and shipping grade a pasteurized milk.

The amount of work that goes into designing and making the paper cups and lids and coffee machines and espresso machines.

And finally, the creation of the actual latte by some cute little barista.

I'm all for supporing musicians, but lets not underestimate the work of others just because their work isn't as glamorous.

Re: Econ 101

50 cents a song. The research overwhelmingly suggests that 50 cents is the ideal price point. If I charged for music that's where I would set it. That would put one of my releases in the range of $3.50, which I think is a decent price. Low enough that someone might think, "Why not?" and high enough that I could buy... half(?) a latte. I don't drink fancy stuff so I have no idea what a latte costs. I'd rather splurge for beverages with a decent beer. IPA FTW.

I've been considering pricing my music at 50 cents (vs free) just to see if it causes *more* downloads. I would not be surprised... attaching a price to something can make it seem more "valuable" to some people. (btw, are we really at a point where we have to put "value" in quotes all the time? Semantic arguments are for lawyers...)

And with a micropayment plan and bandcamp's take, that would leave me with 35 cents from each song purchase. Nothing spectacular, but it stands to reason that you could eat better than ramen if you could "move units". But hey, the economy is rough. No one should be taking *any* sales for granted.

re: Econ 101

Most of the recorded music industry still believes it's immune to capitalism. I agree that most music is worth more than the price of a latte. If the labels could get their heads out of the sand, they'd realize that the worth isn't in the cost. It's in the return.

Any millionaire-iPhone app developer (and there are many) probably feels their product is worth more than $.99 or $1.99. But trust me, they're not upset about the cost of their product. They're raking it in, just like the labels could be if they just, for once, tried a different approach.

"I just think it's silly that Pandora requires a physical release to exist at some other site."

Well, "at some other site" is because they're not a music retailer and have no desire to be one so they partner up with a 3rd party. Nothing silly there. I'd also expect that the reasons they only use Amazon are due to the contacts and the ease of use - asking listeners to start choosing where they get their music from adds significant extra danger of not making a sale at all.

As for the existence of a physical CD, I'd guess at least 3 reasons. One is to stop them from being spammed with every half-assed garage band's recording - if you've stumped up cash or effort to have a CD pressed, you're probably at least half-serious. The second is to service everybody's demand - some people still don't want to buy digital and the last thing Pandora want is to lose a sale because there's no physical product. Finally, a physical CD will usually have copyright information they can verify to check you are in fact allowed to be giving them the music to play.

I can't comment on there having been a change as I'm not allowed to look at it, but I wouldn't be surprised if it's one of the above.

"Pandora is a powerful marketing tool for a musician. "

...but, as mentioned, not the only one, and one that has an extremely limited level of exposure worldwide. You still have a lot of options if you don't want Amazon getting cash or to have to press CDs.

Re:

Well, Pandora doesn't sell any music, they simply redirect to Amazon. I'd rather they redirect to the artist's store.

I'm not sure I buy the spamming issue, simply because they existed for several years before the physical requirement, and they were constantly adding obscure unknown artists who didn't release their music traditionally. I don't understand how spam would only now be a problem. Besides, *every* musician knows they have to press CDs, so they do, so the spam factor's probably about the same as it would be if they accepted online submissions.

But the attitude that someone who presses a CD is more "serious" than someone who doesn't is the wrong attitude, and it works against small musicians for whom pressing CDs is a massive investment. Artwork creation, printing, pressing, packaging... even a small run is more than most musicians can afford. So you're left with musicians that have labels to foot those costs, which keeps us in this same twisted state we're in now.

Like I said earlier, taking home 35 cents on each song can really add up for a musician. But it can't support a label. Labels aren't designed to move small money, they need to move units. But we all want a world where the musicians are empowered, so we need to stop assuming that the only serious musicians are the ones with financial backing.

Re: Re:

"Well, Pandora doesn't sell any music, they simply redirect to Amazon. I'd rather they redirect to the artist's store. "

...and would every artist's store give them the cut of the proceeding sale that they need to provide the service in the first place? I know what you're saying, but keeping everything in one place helps Pandora predict its income, and therefore provide the service it did to you.

"Besides, *every* musician knows they have to press CDs, so they do"

So, what's your problem? If you have to make the CDs anyway, why do you care so much if Pandora want a copy available to help promote your music?

"Artwork creation, printing, pressing, packaging... even a small run is more than most musicians can afford."

Erm, really? As an experiment, I went to CDBaby (http://duplication.cdbaby.com/default.aspx) and went through their automated wizard for a new short run project. 100 CDs with standard cases and shipping, a 2 panel insert with UPC barcode and a B&W CD label cost $184.

Yeah, it's nice to have more features and they'll probably sell better if they do. It's not *necessary* to have more, though. I'm not saying that a musician with a CD is more "serious", but any asshole can upload a digital file - remember, Pandora's output would have been approved by a human being (at cost to them) before you ever heard it. God knows how much crap they had to wade through before that.

$200 at least gives pause for thought for anybody who doesn't really think their music's up to scratch. Meanwhile, if you can't afford $200 for what is after all a business investment on saleable inventory, you have severe problems that uploading a few files won't fix...

Cost of a Latte?

It's funny that they would use the "cost of a latte" for comparison. Starbucks added up the "cost of a latte" to the tune of $10 billion in Gross sales, and $317 million in profit in 2008. Someone needs to show these folks that you can take something that sells for a small amount, sell it a bunch of times, and suddenly make a large amount of money.

fifty cents?

Please show me the "overwhelming research" that shows 50 cents is what music "should" cost.

I buy a ton of music and even *I* think 50 cents is too cheap. A buck a song is already cheaper than music has been in the last 30 years, but that's not good enough for you? Why should the price keep going down?

I hear this argument mainly from people who want to fill their 100 gig iPods and say "do you know how much it would cost to fill my iPod at $1 a song??"" As if ANYTHING should be priced according to how much of it you can fit on your hard drive.

50 cents might work for old, never popular "salvage" titles (labels called it "the nice price" to move stuff that wasn't selling anymore), but as a base price, a buck is very fair.

Music fans should have enough respect for the artists they like to at least cough up THAT much. And like I said, it's STILL cheaper now than it's been in most of our lifetimes.

Re: fifty cents?

It's because of dumb logic like that that some people would rather just take it for free (pirate it).

Artists don't decide how much money their music is worth, the market does. And it's a thin balance too: If they make a reasonable price, they can sell a lot and make a decent profit. If they stretch their luck, they get nothing.

Hehe

Nice comparison to the latte... When selling lattes, I have to restock on several materials and do considerable work to get the latte to customers at high quality. With this music, there are no materials anymore, and the distribution cost has hit the floor. Customers are not PAYING for the "value of the music" or "all the work that went into recording it". They are paying for a single digital unit. They SHOULD be really cheap.

The price of content is going to zero ...

The price of all content is going to zero for the consumer over the next 5-10 years. The trends are there. Historically TV was free and supported by advertising until cable happened. You are going to see alot more Eureka (syfy) style embedded advertising in TV shows (degree, subaru, pepsi machines, etc). Music will end up being used to promote the bands and musicians and not to profit the labels and other middle men.

More and more people are beginning to recognize this as where things are going. For corporations that spend millions per TV episode it doesn't bode well. It becomes financially an unsustainable business model, even with hollywood accounting practices.

Asthmatic Kitty

I guess I am beginning to sound like a broken record, but a song is worth a lot less than a latte. I can always sing or play another song, and if I am locked into a particular song so hard that it is worth MORE than a latte, I need to get a life.
I love music, but there is plenty of good music out there, and if, say, a dollar times a couple of million listeners isn't enough, the musicians need to find another line of work - useful work, perhaps.